{"id":6203,"date":"2018-03-07T09:27:00","date_gmt":"2018-03-07T09:27:00","guid":{"rendered":""},"modified":"2019-06-21T15:34:54","modified_gmt":"2019-06-21T15:34:54","slug":"re-mahmoud-v-ispahani","status":"publish","type":"post","link":"https:\/\/www.lawteacher.net\/cases\/re-mahmoud-v-ispahani.php","title":{"rendered":"Re Mahmoud and Ispahani"},"content":{"rendered":"

Re Mahmoud and Ispahani [1921] 2 KB 716<\/strong><\/p>\n

The effect of statutory illegality on contracts.<\/strong><\/p>\n

Facts:<\/strong><\/p>\n

Under the Defence of the Realm Act 1914<\/strong> an Order was made, titled the Seeds, Oils and Fats Order 1919<\/strong> that said \u201ca person shall not… buy or sell or otherwise deal in\u201d linseed oil without a licence. The claimant had a licence to deal in linseed oil and sold 150 tons of oil to the defendant. The defendant had incorrectly told the claimant that they had a licence to deal in oil. In fact they did not. Later, the defendant refused to accept delivery of the oil, and the claimant sued for damages.\u00a0\u00a0 <\/p>\n

Issues:<\/strong><\/p>\n

The defendant argued that as he had no licence to deal in oil the contract was illegal under the 1919 Order<\/strong>. Consequently, the contract should be illegal and void. Therefore, the claimant could not sue for damages upon it.\u00a0 <\/p>\n

Held:<\/strong><\/p>\n

The Court of Appeal held that the claimant could not sue upon the contract as it was illegal. Banks LJ said:<\/p>\n

\u201cit is open to a party however shabby it may appear to be to say that the Legislature has prohibited the contract, and therefore it is a case in which the court will not lend its aid to the enforcement of the contract \u201c.<\/p>\n

Here, the Order<\/strong> expressly prohibited the type of contract the parties had entered into.\u00a0 Therefore, to enforce this would undermine the purpose of the statute. Atkin LJ said that a court could also infer a prohibition if the statute in question imposed a penalty upon someone entering into that particular contract.\u00a0 However, the terms of the statute would have to be examined very carefully.\u00a0 <\/p>\n","protected":false},"excerpt":{"rendered":"

Under the Defence of the Realm Act 1914 an Order was made, titled the Seeds, Oils and Fats Order 1919 that said \u201ca person shall not… buy or sell or…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[85],"class_list":["post-6203","post","type-post","status-publish","format-standard","hentry","category-cases","tag-uk-law"],"yoast_head":"\nRe Mahmoud and Ispahani | LawTeacher.net<\/title>\n<meta name=\"description\" content=\"Under the Defence of the Realm Act 1914 an Order was made, titled the Seeds, Oils and Fats Order 1919 that said \u201ca person shall not... buy or sell or...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lawteacher.net\/cases\/re-mahmoud-v-ispahani.php\" \/>\n<meta property=\"og:locale\" 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